Racketeering case against Pueblo weed growers (partially) revived by federal court 

  • Shutterstock/Eric Limon

After Coloradans voted to legalize recreational marijuana in 2012, naysayers launched lawsuits aimed at undoing the state's pioneering new cannabis laws.

There was the group of Colorado sheriffs upset over the governor forcing them to violate federal law. There was the hotelier in Frisco who felt a neighboring pot shop was dampening business. There were the horse ranchers in Pueblo who argued the smelly cultivation nearby was lowering their property value. And then, of course, there were the two neighboring states, Oklahoma and Nebraska, that complained recreational marijuana in Colorado was overburdening their own law enforcement.

The suits had some traits in common:

• They all concerned, at least in part, the Supremacy Clause of the U.S. Constitution;

• Three of the four cases got help from the Washington, D.C.-based, anti-drug organization, Safe Streets Alliance;

• And none, so far, has succeeded in rolling back legalization.

Now, one challenge has been partially revived. On June 7, the U.S. 10th Circuit Court of Appeals issued a 90-page opinion on the horse ranchers' case, which had been consolidated with the sheriffs' and neighboring states' cases on appeal. In sum, the three-panel judge decided a lower court judge was wrong to toss the case and that the plaintiffs, Phillis Windy Hope Reilly and Michael P. Reilly, should get a chance to prove some of their claims.

In remanding the case back down to district court, the federal appellate court held that the Reillys — who don't actually live in Pueblo but like to ride horses on their land there — could potentially bring racketeering claims against the marijuana growers.

Such claims pertain to the Racketeer Influenced and Corrupt Organizations Act (RICO) — a federal law usually used against organized crime rings like the Mafia. It also lets private individuals file a civil claim against a "racketeer" who profits off damage inflicted by an illegal enterprise, in this case, the marijuana industry. If successful, the plaintiff gets three times the compensatory award.

Though the plaintiffs will get a second shot at their racketeering claim, they won't get to argue that federal drug law should override or supersede Colorado's Amendment 64, since the panel of judges found that individuals don't have standing under the federal Controlled Substances Act.

Sheriffs don't have that standing either, so the judges rejected their appeal on similar grounds. Oklahoma and Nebraska are also out of luck, since the judges pointed out that only the U.S. Supreme Court can deal with interstate disputes.

That means that the only card to play is the rights of a horse-loving couple in Pueblo. That may not sound too serious, but consider: A pathway for anyone to sue any marijuana-related business, their associates and even the state's regulatory bodies may have just been re-opened.

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